Working Paper: CEPR ID: DP13798
Authors: Benjamin Born; Gernot Müller; Moritz Schularick; Petr Sedlek
Abstract: Donald Trump was President of the United States from January 2017 to January 2021. During that time, except for the period since spring 2020 when the COVID-19 pandemic took its toll on economic activity, the US economy has been doing very well according to key indicators like the unemployment rate and GDP growth. Does Trump deserve credit for the booming economy? To address this question, we develop a counterfactual scenario for how the US economy would have evolved without Trump---we let a matching algorithm determine which combination of other economies best resembles the pre-election path of the US economy. We then compare the performance of the US economy during Trump's Presidency to this synthetic ``doppelganger''. There is little evidence for a Trump effect.
Keywords: President Trump; macroeconomic performance; economic growth; counterfactual; synthetic control method
JEL Codes: E30; E60
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Trump's election (K16) | U.S. economy performance (P17) |
| Trump's election (K16) | doppelganger economy performance (E19) |
| doppelganger economy performance (E19) | U.S. economy performance (P17) |
| external shocks (F69) | U.S. economy performance (P17) |
| external shocks (F69) | doppelganger economy performance (E19) |